Has IFRS resulted in information overload?

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Abstract

The move to NZ IFRS has been surrounded by complaints of too much information being provided. This is not simply a matter of the cost of providing the information, but the possibility of data overload. Data overload is an important issue as it impacts information search strategies and decision outcomes. This relevant for the current debate on differential reporting and for assessing whether NZ IFRS has achieved its goals of reducing the cost of financial analysis. The purpose of this paper is to examine the impact of the move to international financial reporting by New Zealand listed entities on the quantity of data provided in the annual report. Our analysis shows that the annual report increased for 92% of our sample firms. The average increase in size was 29% of the prior years‟ annual report and arose through notes to the accounts and accounting policies. Even after transitional information (e.g., accounting policies and reconciliations) the increase is 15%.